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MPs look to levy; streamers push back
Tax breaks and a streamer levy should be on the table as part of an urgent package of support for the UK’ s‘ crisis-hit high quality drama sector’, MPs have said, in a wide-ranging report which urges the Government to step up the assistance it provides for all elements of British film and high-end television.
The report, from the Culture, Media and Sport Committee of the House of Commons, welcomes the Government’ s stated ambition to make the UK the best place to make film and high-end television but warns that there must be no complacency over its status as a global production hub and calls for a regular assessment of tax incentives to maintain investment from overseas.
At the same time, the report recommends a series of measures to halt the decline of domestic production of culturally distinct British film and programmes, which has failed to keep pace with the headlinegrabbing growth of big box office productions financed and controlled from outside the UK.
While the introduction in 2024 of the Independent Film Tax Credit – as called for by the previous committee in the last Parliament – was a welcome first step for the film industry, the report says the Government should go further, or producers will continue to struggle to develop and raise finance for films, and those that are made will not be seen by audiences. The Committee calls for a tax credit to support the distribution of lower-budget films, among other measures to support independent film.
The Committee further warns that without urgent intervention, the problems seen in independent film will extend to the domestic high-end TV sector, where competition from high-budget overseas production is driving up costs, revenue models are changing due to the terms offered by streamers and commissioning budgets of public service broadcasters are being squeezed by a fall in the licence fee and drop in advertising revenue.
The report outlines evidence that this has put distinctly British content, which is vital to the UK’ s identity, national conversations and talent pipeline, under threat.
Evidence to the inquiry from Wolf Hall director Peter Kosminsky warned that recent hit The Mirror and the Light would not have been made nowadays because of funding challenges, while Black Doves and Kaos producer Jane Featherstone told the Committee that the business models of streamers dictate that shows need to have global appeal to be made.
The Committee’ s report therefore calls for enhanced tax incentives for domestic high-end TV, and for streamers, such as Netflix, Amazon, Apple TV + and Disney +,
which benefit from the creativity of British producers, to put their money where their mouth is by committing to pay 5 % of their UK subscriber revenue into a cultural fund to help finance drama with a specific interest to British audiences.
The report also says that the Government should require licensing of creative works in all cases where they are used to train AI models.
“ Big box-office blockbusters made in Britain have showcased the UK’ s worldclass film and high-end television industry like never before,” declared Dame Caroline Dinenage MP, chair of the CMS Committee.“ But the boom in inward investment of recent years now risks crowding out our many talented independent British producers. While streamers like Netflix and Amazon have proved a valuable addition for the industry and economy, unless the Government urgently intervenes to rebalance the playing field, for every Adolescence adding to the national conversation, there will be countless distinctly British stories that never make it to our screens.”
“ From independent production through to cinemas, all parts of our film and high-end TV sector, and the talented people that make it such a success, are going through a turbulent time. To neglect just one part puts the entire ecosystem at risk, so it’ s therefore vital that the Government goes further and faster across the board to support an industry that is so important to both our economy and our soft power overseas.”
“ Today’ s report sets out a way forward for the Government to put the name of the UK film and television industry up in lights around the world as the very best place to do business and to work, by offering the right tax incentives, tackling skills shortages, improving worker rights and making sure the rise of AI is a positive force, not a disincentive to investment,” she concluded.
Sources within the streamers pushed back hard, pointing out they have invested billions in UK production – including co-pro funding for shows that have come to FTA PSBs, such as Peaky Blinders. They warn any levy cost would be passed onto consumers who would not accept the unfairness of paying a licence fee and then paying again to subsidise the organisation they had already paid for. While accepting streamer purchasing has increased demand, and therefore cost, in the production sector, they are adamant that tax and other incentives the way to underpin production, not a levy, voluntary or otherwise.
“ I hugely welcome the fact that the CMS select committee has endorsed the call for a 5 per cent levy on streamers’ revenue to support public service broadcasting highend television,” commented Kominsky.“ This is a brave thing to do in the current political climate and absolutely the right solution. However, I do think it is important to stipulate that the fund created by this levy should only be available to productions which are either commissioned or co-commissioned by a public service broadcaster. As far as I can see, this isn’ t made clear in the report and it is an essential aspect of the 5 per cent levy solution to the problems our industry faces.”
“ There’ s a lot to welcome in today’ s report, not least the recommendation to increase funding for the UK Global Screen Fund and support for the BFI Certification Unit,” added Adrian Wootton OBE, chief executive of the British Film Commission.“ But it is essential that the importance of inward investment – to which the SVoDs are a key contributor – is not underestimated.”
UK: There must be no complacency over its status as a global production hub
4 EUROMEDIA